04:05 APAC
Post-acquisition change is what can truly expose this risk. With the introduction of new roster patterns, different interpretations of industrial instruments, changes to time and attendance and payroll technologies, and potentially the removal or change to manager discretion to override system guardrails, the assumptions underpinning the annualised salaries can all be invalidated. Without regular and documented reconciliations, against documented assumptions, underpayments can accumulate quietly. What once was compliant, or appeared to be compliant, may fall below minimum entitlements. These issues rarely surface during deal negotiations. They are more commonly uncovered when independent reviews are undertaken or employees begin questioning entitlements. By that point, remediation may no longer be simple. Payroll teams may need to reconstruct historical pay outcomes, interpret legacy rules and resolve issues without complete records to support the calculations. It is essential to have clear documentation of assumptions, system controls, and regular reconciliations. When in an M&A context, early identification of
When in an M&A context, early identification of annualised salary risk allows organisations to plan remediation, communicate transparently with employees, and prevent silent underpayments from becoming a significant liability post-deal.
correct, the risk lies in the fact that they are rarely tested after they are implemented, and may not be updated as the organisations operational needs and processes change. Often, the assumptions that support annualised salary arrangements may sit in spreadsheets, emails, or even more dangerously simply in the knowledge of individual managers or payroll leaders. Formal reconciliation processes are uncommon or may be undertaken only sporadically or when prompted by an issue. When these reconciliation processes do occur, they may be undocumented or incomplete or only apply to a select cohort of employees.
74 I 04:05
GLOBAL PAYROLL MAGAZINE ISSUE 21
Made with FlippingBook - Share PDF online